1.Title:

The Institutionalism: the dynamic between the institutional structure and the action

2.Keywords:

Institutions; Organizations; Post-structuralism

3.Justification/Motivation:

This work is justified, first, by trying to get the gist of the common institutional approach to economic and social perspectives, thus contributing to the development of interdisciplinary studies in organizational studies. Moreover, considering the evolution of institutionalism, this paper seeks to contribute to overcoming the gap between the action ("old" institutionalism) and structure ("new" institutionalism);

4.Research Problem:

The proposed research problem is “What are the confluences and contrasts between the economic and social approaches? What are the contributions of Giddens, Bourdieu and Crozier for understanding institutional change?” The aim of this study is to analyze the contributions of economic and social prospects for the institutional approach, considering the points of contact and distance in the development of the concept of institution. The specific objectives are: (1) present the main elements of institutional economics, comparing the old and new institutional economics, (2) present the main features of sociological institutionalism, comparing the old and new sociological institutionalism, (3) also present the contributions of poststructuralist Anthony Giddens, Pierre Bourdieu and Michel Crozier new institutionalism in social regards of the understanding of the institutional structure.

5.Methods:

This work has a theoretical nature. Authors developed a review of institutional approaches, seeking to highlight their epistemological and ontological bases.

6.Discussion:

Despite the vast literature on the economic and social approaches of institutional theory, there are few works such as Nee (2005) that discuss the interdisciplinary of the economic and social spheres. In fact, both approaches have in common the central assumption that the interaction of institutions with social networking shapes and directs economic action. However, they are far from consensus on the conceptual definition of the institution and how it transforms reality.

With a critical position in relation to neoclassical economics, considered unrealistic by ignoring the historical context, the old institutional economic theory has placed institutions at the center of studies on economic development. The authors who favor this view see the economy as a continuous process of change with the institutions being part of this process and influencing economic development. The old institutional economic theory incorporates the concept of habit as a necessary element for human action. The habit is the central element of the institution, based on which individuals are constituted. Incorporating beliefs and determining behaviors, habits are the result of repetitive actions.

Despite the great analytical contribution on the economic development and understanding of the dynamics of economic institutions, the nature essentially descriptive restricted the scope of Institutional Economics, remaining a dissident movement of the economy with a large number of descriptive material without theory (COASE, 1984). The author questions the concept of the firm, presented by neoclassical economic theory that, in turn, considers the firm as a production function where supplies enter as inputs and outputs as products come out. Neoclassical theory ignores important aspects of organizational and market that permeate the firm. For the author, the concept of the firm is wider, it is considered as an alternative mechanism for the coordination of economic activities (as well as market). The study conducted by Ronald Coase was important in the transition from the “old” to the “new” institutionalism, as it associated corporate performances with capitalistic concepts in an environment with transaction costs (cost of trading, safety and completion of transactions in a market economy) in all governance structures.  The author feels that the firm and the market compete as institutions that coordinate activities which also encompass governance structures.  Although attempting to measure transaction costs, Coase fails to establish criteria and ventures close to the arguments of neo-classical economics when he affirms that economic agents adopt more efficient governance structures (WILLIAMSON, 1998; HODGSON, 1998).

The wide acceptance of the New Institutional Economics was due to the effort of theoretical formulation in the analysis of the role of institutions on economic society. The authors, who share this approach, instead of absolute rejection to the precepts of neoclassical economics, as did their predecessors, have gone into a synthesis effort, trying to correct their deviations and limitations (NEE, 2005).

The institutional model of the “new institutionalism” focuses on establishing efficient markets, based on setting up structures grounded on property rights and promulgating laws, in addition to controlling factors that affect industries.  The “new” institutionalists add to the economic analysis elements such as transaction costs, property rights, limited rationality, and opportunism, among other factors that determine institutional efficiency (WILLIAMSON, 1985).

In general, the New Institutional Economics explains the concept of institution from the social and economic interaction, resulting in rules, laws and codes of conduct, property rights, religion and other restrictive elements of behavior. Institutions are created by individuals to establish order and reduce environmental uncertainty. Thus, institutions can strengthen the economic structure and make changes, resulting in growth, stagnation or decline. Although there is no evidence that the institutions can contribute to economic growth, there is evidence that institutions can affect political and economic factors that may influence economic development. Despite the great advances of the New Institutional Economics in building a theoretical apparatus to the institutional approach, the authors do not explain the beliefs and rules influence individuals.

In the social perspective, the institutional approach appears from the 1940s with the studies by Merton (1940) and Selznick (1949). According to the authors this approach, social interaction is internalized in institutions in a process of institutionalization. Thus, organizations become institutions by a process endowing values, which become source of personal gratification and vehicle of the group’s integrity. Again, despite the efforts devoted to the explanation of the dynamics of the institutional environment, the old social institutionalism also failed to explain its construction.

The importance of the New Institutional Sociology is given by the effort to explain the emergence and development organizations and the institutional environment. According to this view the institutional reality is a social construction. Thus, institutions consist of rules, regulations, beliefs and symbols that influence individual behavior, which is controlled within the organizations for moral, legal and cultural. The authors of the New Institutional Sociology also note that organizations need legitimacy to survive in the institutional environment.

Considering the purposes of each approach, we noticed that the main difference between the economic and social approaches is related to their goals. While the economic institutionalism seeks to explain the economic performance by organizational development, social institutionalism explains institutional dynamics through the pursuit of legitimacy by the organizations.

However, analyzing the approaches from the perspective of the subject matter, the element of unity between the approaches is placed in evidence - the institution. (DEQUECH, 2011). This does not imply reducing the scope or diversity of understandings of the concept but rather understand it as a common denominator. Identify the common elements between the economic and sociological approaches makes it possible to outline the central elements of the institutional approach.

The understanding of the institution as a common element involves bringing research agenda for understanding institutional change, thus underscoring the importance of shared beliefs, norms and institutions in economic life, in other words, the process by which social and institutional relations interfere in the behavior of economic agents and thus to understand the mechanisms of mediation between organizational structure and agency (NEE, 2005). On the latter, are relevant the contributions of authors who have addressed the relationship between structure and individual action to Giddens, Bourdieu and Crozier.

Giddens, in his Theory of Structuration, aimed to understand not only the relationship between individual and structure, but the relations of power, changes and domination resulting from human action on the institutional structure. Giddens produced, therefore, a theoretical synthesis that combines institutional structure and action (GIDDENS, 1986); (PECI 2003).

As well as Giddens, Bourdieu's work is focused on synthesis of objectivist and subjectivist perspectives. Bourdieu's contributions to the relationship between the institutional structure and the individual action revolve around the concept of habit - a subjective system of internalized structures, enabling the establishment of affinity relationships between the practices of agents and the objective (institutional) structures (BOURDIEU, 2008; PECI, 2003).

Crozier, in turn, discusses how the individual action of individuals and groups impact on the organizational structure. For Crozier, power in organizations results from the cooperative interaction among individuals structuring a well-defined system of action. Crozier's work emphasizes the defining mechanisms of individual action in a context of limited rationality and uncertainty (CROZIER, 1981); (GAMA, 2003)

7.Expected Results:

The work is divided into six parts. Besides an introduction, the second section is devoted to presentation of the changes experienced by the Institutional Economics, from its origins in the late nineteenth century to the present. Dedicated to the sociological institutional approach, the third part of the work seeks to establish contributions and limits of institutional sociology since originating works of Melton and Selznick up to neoinstitutionalism social. The fourth session incorporates poststructuralist contributions of Giddens, Bourdieu and Crozier in strengthening the interdisciplinary concept of institution. A fifth section discusses the research opportunities arising from the interdisciplinary perspective. Finally, the sixth session is devoted to concluding remarks.

The contribution sought by the paper are: (1) to point out the common elements as between the sociological and economic approaches, defined from a common object of study - the institutions; (2) to show how the post-structuralism approaches of Giddens, Bourdieu and Crozier from the study of the relationship between agency and institutional structure contribute to an interdisciplinary perspective of the institutional approach; (3) and finally, to present new opportunities for organizational research from this interdisciplinary.